Chinese Tourists Are Increasingly Ubiquitous; Is The West Ready?

 @MarkJohansonIBT
on October 27 2012 1:10 PM
Chinese Tourists
Chinese brides pose in front of the Bavarian castle Neuschwanstein. It is estimated that Chinese visitors to Europe will increase to 4.5 million by 2015 and 8.6 billion by the end of the century. Reuters

For centuries, those in the East have scrambled to accommodate the needs of those in the West, but in the next decade things will change.

Introducing the world’s most sought-after traveler: the Chinese tourist.

The UN World Tourism Organization predicted in 2005 that by 2020, 100 million Chinese citizens would travel outside of the country. With 70 million outbound tourists in 2011, 80 million expected in 2012 and an average growth of between 12 percent and 15 percent, the UNWTO has since revised its forecast and now says 100 million globe-trotting Chinese will troll the planet by 2015.

What that means is that in less than three years’ time, China will become the single largest source of international tourism while simultaneously possessing the largest domestic tourism market in the world.

So is the industry ready? The answer is a resounding NO!

A Bath, Slippers, Twin Beds And Tea

It’s clear now that China will play an outsized role in global travel and tourism, but those in the West are just waking up to the reality that they need to make changes in order to cater to the masses soon to arrive on their shores.

Roy Graff, founder and managing director of China Contact, said the growth of the Japanese market may have changed the industry slightly, but it “was just a drop in the ocean compared to what Chinese tourism can impact.”

Japanese travelers, he said, compelled hotels to offer more rooms with twin beds or provide baths instead of showers. But the Chinese have their own unique travel habits.

“There are certain amenities they will expect in their room,” Graff notes, “such as slippers, a kettle to make tea, instant noodles and chopsticks.” They also expect a breakfast menu that has less cheese Danish and more meat and congee.

And these are just the basics. If a hotel really wants to attract Chinese customers, it needs to offer a Chinese-language TV channel and have printed information like maps and brochures in simplified Chinese. If it’s a larger hotel, there should be someone on staff who can speak Mandarin. Going further, Chinese groups should not be allocated rooms on any floor containing the number four because it sounds like the Mandarin word for death. Also, red is lucky, but too much white is frowned upon.

Other modifications mentioned in a recent Hotels.com report include Chinese food menus, a hotel website in Chinese, Chinese newspapers and a China UnionPay partnership. The same report found that a shop, restaurant and bar are the most important facilities to Chinese visitors.

Frits van Paasschen, president and CEO of Starwood Hotels & Resorts, said “as Chinese travelers begin to travel beyond their borders en masse, they, like their Western counterparts before them, will gravitate to the hotel brands they know from home.

“Just as our hotels in China have historically catered to American and European travelers with familiar amenities from home, now our hotels globally will provide the same services to Chinese travelers."

Those services at Starwood’s Sheraton, Westin, St. Regis and other hotels include an in-house Chinese “specialist,” Chinese-language collateral, familiar foods and the attendant tea kettles, slippers, instant noodles and assorted toiletries upon request.

Hilton, too, has a similar program, Hilton Huanying, which includes much of the same in addition to Chinese breakfast options, and is now available in 70 key hotels in 23 countries. Ritz-Carlton rotates its general managers and top staff through its Chinese hotels for three-year training stints, while Marriott held its annual meetings in Shanghai and Beijing this past summer.

Yet, a shift toward more China-centric accommodation is not without its troubles. Whereas many Chinese travelers prefer louder areas, group meals and nearby shopping, many Europeans and Americans prefer more solitude, peace and quiet. Hoteliers, meanwhile, struggle to strike the right balance.

No Chinese In My Hotel

Thierry Gillier, founder and owner of the French fashion brand Zadig & Voltaire, spoke with Women’s Wear Daily earlier this month about his company’s first hotel, due to open in 2014.

“It will be a slightly private hotel, not open to everybody, with 40 rooms. We are going to select guests,” he said. “It won’t be open to Chinese tourists, for example.”

This quote went viral though China’s social media networks in a matter of days and, at Gillier’s request, the magazine later changed the phrase “Chinese tourists” to “bus-loads of tourists” -- an equally unfair judgment.

Gillier’s racist remark underscores a certain perception people, particularly Europeans, have about Chinese: They travel in big groups, rarely stop (save the quick snapshot) and see 10 countries in two weeks.

What he failed to realize is that, given Europe’s faltering economy, without the guests from emerging markets like Asia, European luxury brands like his would already be out of business.

According to the World Luxury Association, Chinese consumers -- burdened by a 37 percent tax on luxury goods at home -- accounted for approximately 62 percent of Europe’s luxury goods sales in 2011 (though much of this was spent on European goods available duty-free in Hong Kong and elsewhere in Asia).

As the U.S. climbs out of a recession and Europe suffers through the doldrums of an economic downturn, the Chinese have emerged, and they’re here to fill in the void.

‘Approved Destinations’

A 2010 report by London University’s School of Oriental and African Studies, in association with Hilton Hotels and Resorts, estimated that Chinese visitors to Europe would increase to 4.5 million by 2015 and 8.6 billion by the end of the century. With those kinds of figures, it’s easy to understand why hoteliers and others are racing to adapt. They’ll have to if they want to survive.

Last December, the European Travel Commission (ETC) took this information to heart and announced the launch of Travel Destination Europe and the visiteurope.com portal in China.

“We are incredibly excited about the huge potential for growing the number of Chinese visitors to Europe, so much so that we have made the decision to focus on China as one of our most important markets in our new ETC strategy,” Petra Hedorfer, president of the ETC, said at the inauguration ceremony in Beijing. “With the launch of our new Chinese Web portal, visiteurope.com, today we declare our common initiative to focus on the Chinese market.”

Across the pond, an estimated 1.1 million Chinese visitors hit American shores last year, contributing more than $5.7 billion to the U.S. economy. According to Commerce Department estimates, that number is expected to rise threefold by 2016. Moreover, the department figures that Chinese visitors will spend about $6,000 per trip, $2,000 more than the average international tourist.

The Chinese tourism boom is a relatively new phenomenon in the U.S., which, unlike its European counterparts, didn’t receive the People’s Republic’s “approved destination” status for group tours until 2007.

Nevertheless, Chinese have arrived stateside in unprecedented numbers thanks in no small part to President Barack Obama’s streamlined visa process. And it’s not just business travelers; more Chinese are coming to the U.S. for fun.

A recent poll from the Wyndham Hotel Group of 4,300 business travelers found that Chinese were the most likely to mix business with pleasure, with 67 percent of Chinese respondents saying they’ve invited a spouse or family member to join them while away for work.

As Chinese consumers gain experience traveling abroad, now, more than ever before, they are looking into specialized leisure travel niches, and those who do the best to plant their foot in the market early will see the biggest rewards.

How To Market To Chinese Tourists

Let’s say your company has a great social media department with thousands of Twitter followers and tens of thousands of Facebook likes. Your global marketing plan may work great for 80 percent of the world, but what about the 20 percent that live in China where Facebook and Twitter are replaced by state-controlled Renren and Sina Weibo?

“When companies talk about global marketing, they cannot say ‘Well it’s China.’ It has to be an integral part,” Graff said. “The issue is that if you have a global Twitter or Facebook marketing plan, you need a separate plan for their Chinese equivalents.”

Offline, forging people-to-people connections in China is key.

“The change in Europe and North America is going to be profound. Chinese are going places many tourists didn’t normally go, so it’s kind of like a blank slate. You can create the story that attracts the Chinese consumer.”

Armed with the knowledge that Chinese love to shop, the retail industry has done particularly well at this. They realized that while many European or American visitors list beaches or national parks as the highlight of their vacation, surveys show that many Chinese tour groups cite a mall.

Groups like Simon’s Premium Outlets, which operates 72 malls globally, now send representatives to China annually to make sure their malls are integrated into tour bus itineraries.

“For the past six years, representatives from Simon have traveled to China to attend the China International Travel Market in Shanghai and Kunming,” spokeswomen Michele Rothstein said, adding that her company was one of the first to do so. “We work with our area Visitors and Convention Bureaus to support their efforts to attract Chinese visitors and implement a wide range of marketing strategies.”

Chinese visitors, she said, are the company’s fastest-growing international market segment, and Premium Outlets’ malls have added appropriate language materials, currency exchange and staff that speak Mandarin to adapt to the growth.

Airlines have done considerably less than their retail and hospitality counterparts to lure Chinese travelers, though KLM and Air France both have a strong marketing presence in China. In the end, the companies that make changes now and build bridges to welcome Chinese will be the ones who float when the wave building out at sea hits.

Over time, growth may slow and Chinese will likely become more discerning with their money and choices, but one thing’s clear: The Chinese are coming.

Are you ready?

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